Signs of the Times

Unemployment level rises by 41% in last twelve months

The total number of people out of work in the Balearic Islands currently stands at over 70,000, which represents nearly 15% of the active population

Construction. The sector most affected by the economic crisis

Construction. The sector most affected by the economic crisis

C.M.W. Maó
The number of new additions to the Balearic unemployment register in November was 13,162, bringing the total of unemployed people in the island group to 70,144, an increase of 45.8% on last year.

In Menorca the year-on-year increase was slightly lower than the other islands, 41% compared to 47% in Mallorca and 42% in Ibiza. The total number of people out of work on the island now stands at 5,680, 1,660 more than in November 2007.

Last month the level of unemployment in the Balearic Islands was 14.7% of the active population which compares to 10.4% a year ago. All sectors have seen a rise in unemployment, with the biggest increases being amongst men, non-European Union foreigners, the construction industry and the sector of the population looking for their first job.

Whilst admitting that November's figures are bad, the Balearic Councillor for Labour, Joana Barceló, still believes that the figure will not rise above 80,000 before the end of the year.

The Director General of Strategic Planning, Llorenç Pou, stated that, in addition to a worrying level of unemployment, there is another negative factor and that is that there is a drop in the overall number of people being taken on for work, especially in the construction industry. However, some sectors, such as health, veterinary, education, I.T. and recreational activities are still employing people but in general the uncertainty caused by the poor economic situation deters companies from taking on additional personnel.

Construction falls 40%
According to statistics provided by the Constructors' Association, in the first nine months of the year, the industry's turnover was down by 40%.
The number of homes built between January and September this year was 391, compared to 1,265 in the same period last year (a drop of 69%) and invoicing was down 50%.

The construction of warehouses and other basic projects was also hit, with practically the same area being built but invoiced at 33% less.
The only sector of the industry to show an upturn was tourist accommodation, with hotel chains modernising their establishments, such as the Barceló group which this year has invested 9 million euros in refurbishing the Hotel Pueblo.

Promoter in problems
Cala Llonga Properties Development, the promoter behind the tourist complex on the northern side of Maó port, is on the verge of bankruptcy.
Work on the controversial project was halted in November 2007 and in February this year the Council refused to grant permission for a modified scheme. Since then the development company has tried to renegotiate its debts, such as payments owing to the construction company Sacyr Vallehermoso and payments made in advance by buyers of the properties, but it is in a precarious situation.

Despite the company's attempts to negotiate with the bank, proceedings have started to put the land and part of the construction up for auction.

Kraft rumours
The 180 workers in the Kraft Foods factory in Maó may be informed about the plant's future this week, putting an end to the rumours circulating. There are few options open to the multinational company: the factory could be closed; part of the production could be passed to another of the firm's plants in Belgium; the Belgian factory's production could be moved to Maó; or the factory could be sold to another company.

Union delegate Margot Sastre explained that over the last few months, the company has introduced a new marketing strategy in the production of cheese, aimed at optimising production at an international level. The workers' committee is concerned that the Maó plant will be closed or lose part of its production to its Belgium counterpart, as both plants manufacture soft cheese and cheese slices and portions. The union stresses that the Maó plant "is not in crisis" and fears that the company will use the current international economic situation as an excuse to take action which is not in the local factory's interests.

The Island Councillor for Agriculture, Antònia Allès, declined to comment yesterday on the possibility of the Kraft factory closing, but she did point out that five years ago the company bought milk from about a hundred Menorcan farms but that now the figure has dropped to around twenty.

Less tax for Alaior Council
Alaior Council's budget for 2009, totalling 11.9 million euros in total (1.1% higher than this year), reflects an anticipated drop of 30% in the amount of indirect taxes the Council will receive. The drop is mainly due to a reduction in building licences which are expected to bring in around 403,000 euros, some 200,000 euros less than this year.

This will be partly compensated for by an increase in other indirect taxes and municipal taxes and the Council is to receive 10% more finance from other administrations. However, capital income, such as from beach concessions, is also expected to be lower, by around 13%.


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